[00:11] Mike: Welcome to Startups For The Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.

[00:20] Rob: And I’m Rob.

[00:21] Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s going on this week, Rob?

[00:25] Rob: You know, I want to give a shout out to Dan and Ian from the Lifestyle Business Podcast. They just wrapped up their first in-person tropical MBA mini-conference. I think there were eleven or around a dozen entrepreneurs that are kind of in their audience and they just wanted to bring them together in to one place. And the cool part was in the most recent episode of the LBP, Dan had mentioned that us doing MicroConf and talking a lot about kind of the inner workings of it, you know, our behind-the-scenes episodes we’ve done each year, he said that we may had part in influencing him to kind of do an in-person event because — it’s actually an uncommon thing in terms of podcasters who build an audience and you tend to interact with people via e-mail, via the podcast itself and maybe via a blog but it is indeed, you know, kind of a rare occurrence for a podcast to actually blow up in to a full-pledge conference.

[01:13] Yeah, I’d just wanted to congratulate them and it felt good that, you know, we may have been a very small part of the inspiration or at least got the spark going in his mind of, hey we, you know, we should bring folks together in to one place and they did it. You know, we do it in Vegas. They did it in two weeks in the Philippines.

[01:28] Mike: Yeah, I can’t imagine trying to coordinate anything like that overseas. I mean I think that that just be really hard and it’s funny because we’ve gotten a couple of requests from people, I guess more than a couple for us to do like a MicroConf in Europe. And it’s one of those things where it’s — it’s honestly kind of intimidating to even consider doing something like that. For them I think it’s a little different because they knew the area and they know how to get in and out of the country and all these — all the logistics of coming in themselves. But for us to do something in Europe seems extremely intimidating just because we’d have to deal with booking our hotel over there, you know, depending on the country they — we would have to deal with the language barriers and things like that. And I think that a hotel, it’s a lot easier to get by speaking English but I just can’t imagine trying to get people to come in from a foreign country and to actively trying to pursuit that type of an audience and bring them in.

[02:19] Rob: Yeah, I think they, you know, they did it smart. They started small like I said they’re only about a dozen folks there. They didn’t do — I mean it wasn’t like MicroConf where there is a hundred and sixty people there and we fly speakers in from around the world. I mean they just, Dan and Ian led the sessions. This is just based on — listening to the podcast. I don’t have any insider information. But Dan and Ian led the sessions. I think they had — they had Tim Conley from Foolish Adventure and maybe another expert or so. And it was kind of more like a seminar. It was a two-week long thing and it was — people hacking away, you know, kind of day and night trying to get to launch and then meeting during the day and giving inspiration and feedback and all that stuff. So it was just super fast iterations. And I think the whole — the whole program actually run two months, maybe a little longer than that and a combinator in this two-week hackathon. So it was — you can almost think of it as like maybe a Y combinator type of thing where they got a group together and you know, they let them feed off of each other’s energy and then folks gave each other feedback and such.

[03:11] But that would definitely be easier to organize in the Philippines or something if you had someone living there like, you know, Dan. I guess he’s not living there but he’s, you know, he frequents there and you only have eleven people to worry about because you’re right, if we’re — if we had to do something in like France or I don’t know, Western Europe or anywhere, there would be — there’d be some hurdles for us to have to jump in order to get — pull off a MicroConf. And I have seen, yeah, we’ve had at least a dozen requests to do something like on the East Coast to the US or in Western Europe. I think definitely on our radar but that maybe a year or two out until we really have everything, you know, dialed in with our — our West Coast one and then we can think about hiring someone to help us with the, you know, something in England might be the best place to do it actually. It’ll eliminate the language barrier and it’s just, you know, a nice Central easy place for people to get to I think.

[03:59] Mike: Well, having a second MicroConf in Europe would certainly alleviate the problems associated with, you know, keeping MicroConf small because then we’ve had two instead of one. [Laughter]

[04:07] Rob: Yeah and as you know, I mean based on people that write in as well as folks in the Micropreneur Academy, we have a quite an audience in Europe and I think when I first sold my — when I first put my book up for sale, I was surprised that 40% of the sales were from outside the US and there was a big chunk of those were in Western Europe. So I actually do think like there, you know, that we do have enough of momentum there that we probably could pull it off in terms of ticket sales. It’s just all the other stuff that goes along with it that I just don’t think you and I have the time right now. You’re trying to get AuditShark out of the door. I’m trying to grow HitTail and it’s like taking or I have the ball to do, you know, another conference and it doesn’t feel like a wise move at this point.

[04:46] Mike: Just recently we actually got a podcast question which we’ll probably cover in the near future, a question that came in from somebody in Zimbabwe so —

[04:57] Mike: Yeah, I’ve been trying to figure out exactly how much longer it’s going to take to get AuditShark out the door and I went through all the different bugs or the majority of the different bugs and cases that are outstanding in order to get AuditShark to launch. And I’ve started cutting things left and right. And it’s funny because things that used to be must-have’s to me if — I guess I’ll say, I’ve dialed them back and [Laughter] then just kind of threw them away and said, “You know what? I really don’t need that.” And it’s just interesting how my perspective has shifted in terms of just trying to get the product launching out the door.

[05:31] Rob: Do you have an example of like a specific feature that you’ve — that you used to think was a must-have and that you’re able to get rid of it?

[05:38] Mike: Yeah, I can — I think one off the top my head which was a — because everything is in Azure, I wanted to be able to run things like reports and things like that on a daily basis or weekly basis or whatever. And one of the issues with running that stuff in Azure is that because everything is distributed, there’s no expectation of concurrency anywhere. So when you deploy an application out there, it has to be written in such a way that it can run on its own or with other copies of itself. So if you have a scheduler for example, the problem with a scheduler is that you can’t just deploy it out there and have everything run because the first part of the problem is, you know, the redundancy. I mean the primary purpose of using Azure is to, you know, rely on that redundancy and if you only have one copy of that Azure worker role or web instance out there, then there’s no guarantee that it’s going to stay up and running.

[06:33] You know, they move things all — all around all the time. They bring things up, they bring things down and you have no control over that but you’re using things on a platform and the expectation that they have basically set forth is that if you build your application correctly, they can bring one of them down and they set up rules so that they’ll be in different machines and different physical hardware so that they can bring one down and then bring you up another copy of it some place else. And your traffic just kind of gets a load balance between them. If you deploy a single instance, you don’t get any of that redundancy and the problem with Azure is that it can drop that instance at any given time and you’ll basically lose everything scheduled during that timeframe until it comes back up again. So it’s possible for the thing to go down and then you lose it, you know, anything that will — was scheduled to go off during that time will basically be gone. It just won’t happen. So whether it’s reports or whether it’s specific tasks that need to go on and that you really have no notification or way of knowing that that scheduler went up and down.

[07:31] Rob: So it’s —

[07:31] Mike: And that’s kind of a problem. [Laughter]

[07:32] Rob: Right, right. But what’s the feature that you had that you’re not going to do?

[07:36] Mike: It has to do with organizing the data and the building reports off of it.

[07:41] Rob: I see. So you had a feature organizing data building reports and you’ve decided to drop it because it’ll get you to market faster. Why the change of heart? What convince you that you could do this now? Is it just looking at it with fresh eyes? Or is it that it’s serving a new market now?

[07:57] Mike: No, it’s more of a I’ve decided not to try and build a redundancy in to it and if it —

[08:03] Rob: Got it.

[08:03] Mike: … hacked out, then there’s only so much I can do about it, so it’s one of those things where what’s the harm if somebody doesn’t get a particular report especially if it happens within the first couple of months of the application being live.

[08:16] Rob: Is it — is it a report that would run in the background that’d be e-mailed to someone or it is someone —

[08:19] Mike: Yes, no. It’s —

[08:21] Rob: Okay, a background report.

[08:21] Mike: … it’s back end process. At that time, there’s this process that scheduled that will kick off and run a report. Well let’s say, 12:04 the — the Azure instance drops and then comes back five or ten minutes later. Well, that scheduled repot is not going to execute. So it will never execute. It actually won’t execute until the next day. So that daily report will not go out pretty much for anybody, you know, for you running this process once a day and just a report is just one example. I mean there’s a lot of other back end processes that, you know, I’m looking at that I might — I may end up scheduling. But if that’s the case, how often could it happen, you know, if you only have something scheduled once day, chances are good that it’s probably not going to it hit very often.

[09:01] Rob: Right.

[09:02] Mike: But I mean there’s a lot of things where people are going to be putting schedules — schedules in to the system. So they’re going to say, “I’m going to schedule my audit to run on my servers at 1 a.m. or 2 a.m. or 3 a.m.” Oh, what happens when those things kick off and —

[09:16] Rob: I see.

[09:17] Mike: I’m caching them on the client sides so I don’t think that that’s going to be an issue. It’s going to be more if the customer decides to make it change in the near, you know, somewhere around the time that audit supposed to kick off and it’s just not going to be able to stop it in time or reschedule it and —

[09:32] Rob: Right.

[09:32] Mike: … I look and I said, well that’s probably not a huge deal right now.

[09:35] Rob: But how hard is that to fix after you’ve launched if it becomes a big deal?

[09:39] Mike: It’s a — it’s a very challenging problem like it does shoot —

[09:41] Rob: Got it.

[09:42] Mike: … it fault tolerance. Scheduler is a very hard problem.

[09:44] Rob: Right, so it’s not — yeah, it doesn’t but it doesn’t become any harder because you do it after launch. It’s the —

[09:48] Mike: Yeah.

[09:48] Rob: … same difficulty basically to do it now and do it later.

[09:51] Mike: Right. And now all —

[09:52] Rob: Yeah.

[09:52] Mike: … I’m doing is just saying well there is only so much I can do. I think it would be a significant engineering effort to make it work and I’ve talked to some people within Microsoft to say how would you actually do this and you know, they’re still trying to get back to me.

[10:05] Rob: Yeah, it seems like — a pretty big limitation with Azure because I have — you know, I’m on a basically a cloud server which is essentially a really beefed-up VPS, right, Virtual Private Server and that’s what runs HitTail. And I have at least a dozen tasks that run in the background daily. They’re — there’s billing that runs every night. They’re, you know, they’re all console apps, right, just Barebones EXE’s that pulls off out of the database and do something with it and then — and then stop. And so there’s — there’s billing. There are — there’s an eMailer that you get keyword, e-mail alerts. There’s a few reports that it actually generates and e-mails to me about the number of trials of previous day, the high volume users, you know, just different stuff so I can keep track of it. And when they don’t run once, it’s actually not catastrophic. I mean even billing has choked a few times. I’ll, you know, upload a buggy version and it’ll crash. And since I’ve written it so that if I run it the next day, it’ll go back the previous two days, obviously, it’ll go, you know, kind of bill everyone who should have been billed by now. But that’s pretty rare that that happens and I can count on it running everyday because I’m using the Windows Scheduler. The Azure doesn’t have anything like that or it doesn’t have an equivalent, you know, mechanism.

[11:15] Mike: You can do those things but because of the way AuditShark works, it’s a little different. At least about the underline architecture for it is such that when something is scheduled to go off, it’s not initiated on the client. So what happens is it’s initiated on the server. So the server says “I’m going to spawn this task and this task needs to happen on the client.” So what it does is as part of that scheduled task on the server, it creates an entry in one of the Azure queues and because the clients are pulling in to the system and saying, “Hey, do you have anything for me to do? Do you have anything for me to do?” It creates that task basically on the fly. So it’s more of the fact that it is time sensitive in terms of the delivery and not the fact that, you know, there’s this report — I mean the reports was just one example.

[12:03] Rob: Right.

[12:03] Mike: And it’s probably not a big deal if it runs, you know, if somebody doesn’t get a report Tuesday night and they get one Wednesday or they, you know, it doesn’t kick off Tuesday night and then Wednesday morning I look at it and say, “Oh this didn’t get out. Let me fire it off manually and just go ahead and do it.” That stuff, I don’t think is a big deal. What is a big deal is if somebody schedules their audits for the middle of the night and then none of them run.

[12:25] Rob: Yeah, I agree. So it’s — it’s early July right now. And you are honing in on — on what timeframe for doing your beta and other stuff?

[12:35] Mike: I was going to say September 1st.

[12:37] Rob: Yeah. So somewhere like first week of September is what you’re looking at?

[12:40] Mike: Yeah, the first or second week of September, probably at the latest.

[12:43] Rob: And that is what — that’s when you’ll have beta to – you’ll let like a handful of beta testers in to start?

[12:49] Mike: Yeah, I mean that’s probably when I’ll start opening up to, you know, multiple private beta testers. I mean I’ll probably be reaching out to a couple of them within the next week or two to see if I can get some of them on in August. So it’ll kind of be, you know, there’ll be some that will come in on August, probably only one or two, maybe three tops and then hopefully, once I get in to September, then I’ll kind of flashed out more of the issues and you know, add in more private beta testers. And then I think that the first, first or second week of October is kind of what I want to shoot for a full blown launch.

[13:21] Rob: Because Labor day is September 3rd and that’s a holiday. So, you’re looking at September 4th or you’re looking at the September 10th?

[13:28] Mike: I was looking at September 10th because –

[13:29] Rob: Right.

[13:29] Mike: … if I’m talking to these people beforehand, you know, the Monday afterwards or the day after and say, “Hey, would you like to beta tester?” I want to talk to them beforehand. I’m going to talk to them in August at some point.

[13:39] Rob: Let’s say a date. Let’s say it’s September 10th and it’s just so that we can revisit this in — I mean that’s basically two months away because it’s July 10h today. So you have two months to get — get your stuff together. What happens between now and then? Is that all feature development?

[13:53] Mike: So some of it is feature development, I’ve still got that back end tool that is being built and that, you know, working through a number of different usability bugs right now but I have to have more conversations with people about what their expectations are for what the tool tells them because the engine, you know, the engine works the way that it works. It grabs data from the machines and puts it out on to the servers and I can run at least minimal reports at this point. But what I really wanted to find out from people is what things they’re interested in knowing about their machines. Are they more interested in — in like the vulnerability side of things or they’re more interested in path side of things? Are they more interested in industry standard configuration policies?

[14:35] I mean I’ve been reading a lot lately more of to gaining marketing material for my website and in looking through different ways that machines are — are hacked in to or compromised, a lot of those breaches come from system misconfiguration. So that was kind of really what my goal was. But I want to know is that people or something to people are actually really concerned about or is it, you know, just the data there, out there is telling me hey, this is a scenario of serious concern and it becomes more of an education process because I don’t want to have to educate people as much as possible. I really like to have them to say, “Yes, I recognize this is the problem. I want you to tell me what all the issues are with it.” And the product can do it. It can do all of those things. I just really need to figure out I guess what my landing point is in terms of the content that’s loaded in to the system. So —

[15:25] Rob: Very cool, man. Two months obviously we’ll be talking about it between now and then but I’d just kind of want to get — get something on the calendar so we can check it out as it — as it gets closer.

[15:34] Mike: So I have a question for you. You —

[15:36] Rob: Yes.

[15:36] Mike: … you had done this, the articles for HitTail and you had started pushing that to people and having them be able to request articles based on the keywords. How is that going?

[15:47] Rob: You know, it’s — it’s going quite well. It’s actually going better than I thought it would. I knew that there’ll be interest in it but there had been multiple articles purchase pretty much everyday. And so I did almost eighty articles. It was like seventy five articles in June that were sold and then looking to — I’m actually on track to beat that in July. And so what that’s done is I talked a little bit about it last time but in effect as raised the lifetime value of a customer because that revenue aside from the — the money that goes to pay the authors, that revenue is now — it’s pretty much pure profit. It just — it goes straight to the bottom line and as a result if I divide that whole, you know, the big bucket of revenue by the number of active customers, I have this — this bucket of money that’s basically increasing lifetime value and it means I can now spend more money to acquire a customer and that really was the original goal. I mean I talked about this in MicroConf talking. It was definitely the goal was to increase that lifetime value because aside from — from increasing prices or keeping people from canceling like lowering churn rate, selling extra things to people, extra value, extra things that they need is one of the best and easiest —

[16:58] Mike: Yeah.

[16:58] Rob: … ways to kind of increase a lifetime value of a customer. So you have more money to work with when you’re doing your marketing. So I’ve been pretty happy. I’m actually getting in to some paid acquisition with HitTail to haven’t done up till now because the funnel was so — it was a leaky funnel is what the phrase I use. People were just bailing during the trial and then the churn rate was high but I got that tamed and so now I’m actually, looks like I’m going to be able to use some — some paid acquisition and make money out of it pretty easily. So it’s — it feels like a good time to be — to be doing this. I’m really glad the articles have worked out to say the truth. And I think for the amount of hours that I spent building it, it’s probably been the most profitable feature that I’ve implemented in the past almost year that I’ve owned HitTail now.

[17:41] Mike: That’s really cool. I mean a lot of that sounds very similar to just basically selling additional products to your, just say, audience.

[17:49] Rob: That’s what exactly what it is, yup. So with DotNetInvoice when we wanted to increase lifetime value, we added on. We have a QuickBooks Integration, you know, little modules that’s like 99 bucks. And so it’s along the same lines, right? It’s just selling one more thing that people probably have already requested or maybe they haven’t but you know that it’s a good compliment to the service and create a lot of value for both you and the users doing that. The funny thing is maybe the punch line to the whole thing is yes, my — my revenue, my profit went up but I have this monthly milestones I’m trying to hit and typically it’s like I want to grow by a thousand dollars month over month, right? So it’s a small growth right now but I missed the milestone by $14 this month which I did two —

[18:29] Mike: Oh.

[18:30] Rob: … months ago as well, right? So it’s like one more article would have pushed me over the revenue mark. But again, it comes back to, okay, so fairly, you know, by — by comparison to 14 bucks it’s a pretty large number and I missed it by 14 bucks like it actually doesn’t really matter because I’ll blow past it next month, anyways. But it was just funny to add those numbers up and be like, “Oh, it’s going to be close, it’s going to be close. Oh…” That the agony —

[18:54] Mike: [Laughter]

[18:54] Rob: … just defeat, you know. But it’s nice to see – to see the growth coming. I’m actually I saw a big rush of traffic because I did the AppSumo deal in June and that went well. It sold a lot and so I should be expecting a big chunk of cash from that that I’m done hoping to feed in to my paid acquisition funnel to just, you know, be able to leverage that cash in to buying some ads through some different channels I’m trying out and hopefully, continue to grow the recurring revenue because the AppSumo deal is all one-time revenue, right? They basically bought a year’s worth of HitTail for a discounted price but I want to take that cash and put it to good use by building recurring revenue and that was really — really the goal of it.

[19:31] Mike: Now, did you include the — the money from the AppSumo deal in to your June numbers or no?

[19:37] Rob: I did not, no. Yeah, I know the AppSumo deal I bet will do between two and three times my monthly June revenue that I will — I will net two to three times the month of June revenue purely from that AppSumo deal. That’s — the audience is huge, dude. So they, you know, it’s a really quick influx of cash is what it is.

[19:55] Mike: Uh huh. So basically based on what you just said though, you know, what you’re supposed to do generally when you’re doing accounting for these types of things is when you get those one-time revenue spikes that are for a year in advance, you’re supposed to take that whatever that number is divide by twelve and then amortize it over the course of the next twelve months. So realistically, you did probably —

[20:15] Rob: Right.

[20:15] Mike: … hit then.

[20:16] Rob: I did.

[20:17] Mike: That $14 is covered I think. [Laughter]

[20:18] Rob: Yeah. Oh, it definitely is. I’m just not — I’m just not going to do that because I’m going to — I get paid, you know, in about a month. They pay net 60. So I get paid in early August and I’m basically going to just reinvest that right back in and I’m not — probably not going to count – I’ll probably put an asterisk in my little revenue tracking sheet and say this month, you know, I took away X thousands of dollars from the AppSumo deal but I’m not even going to — I’m really way, way more interested in recurring revenue. This one time burst in revenue even if they are high four and low five figures, I won’t say it’s not interesting to me but it isn’t as nearly as interesting to me as something that is building up that monthly recurring flywheel, right? It’s the flywheel that I want to get. So just because I can — if I can license something or you know, do one big sale that goes in one big influx of cash, I want to take that money and just reinvest it back in to creating more flywheel revenue, more recurring revenue.

[21:09] Mike: No, I understand that. It’ll make sense to me. I mean I was just saying that in terms of your the charts and stuff that you’re putting —

[21:15] Rob: Yup.

[21:15] Mike: … in for, that was just probably, you know, divide by twelve and then add it in every month for the next twelve months.

[21:22] Rob: But yeah and based on accounting and tax accounting and all that stuff, I’m sure that’s what I’m supposed to be doing but it’s kind of yeah, I’ll just lump it in with my annual revenue at the end of the year. Hey so, you’ve been working four tens.

[21:33] Mike: It’s going pretty well although I’m not particularly thrilled about getting up at 5:30 in the morning. I mean I’m sure there’s people who listen to this and are like, “Oh 5:30 is nothing. I get up at 4 or 3.” I am not a morning person by any stretch of the imagination. I mean if I — if I were a president of the United States and I could had the power to abolish mornings, I totally would. Like no work anywhere, would get on before noon. [Laughter]

[21:55] Rob: So but you’re — but you have Fridays free now, right? You’re basically able to get — if you’re traveling, you’re able to get home a day early and —

[22:02] Mike: Right.

[22:03] Rob: Have you been able to put in time on AuditShark on those days?

[22:05] Mike: Yeah.

[22:05] Rob: … just spent and do another stuff.

[22:06] Mike: No, it’s been on AuditShark so, you know, I’ve been getting home late on Thursday evenings or you know, really early in the morning on Friday but then I get up Friday morning and then I have pretty much all day to work on AuditShark which is really kind of nice. And you know, because I have — I’m off to five contractors working for me right now. So I have all of them doing different things but managing them, you know, in the evenings is much more of a full time job than I thought it’d be because —

[22:32] Rob: Yeah.

[22:32] Mike: … I have to direct people all over the place and say, “Oh, you need to do this,” or “This isn’t right,” because I have everything going through FogBugz, you know. And it’s nice to be able to manage all that stuff in there but at the same time, I feel like there’s times where I have to micromanage things because they are all contractors. And I think maybe this is a little bit of a difference between employees and contractors where contractors will not do something unless you explicitly tell them to do it —

[22:57] Rob: Yes.

[22:57] Mike: … versus employees who will probably look and hence say, “What should I be doing to kind of move —

[23:01] Rob: Yeah.

[23:01] Mike: … forward?

[23:03] Rob: Right.

[23:03] Mike: So I felt like —

[23:03] Rob: Right.

[23:04] Mike: … I’m doing a lot more micromanaging than I would like to be but I don’t know if there’s another choice right now because it’s not like I have the money to hire — hire somebody full time.

[23:12] Rob: Right, you know, that’s what I’m going to say. I think as you move up to chain, what I’ve discovered because I’m starting to move up to chain with a few oDesk contractors with kind of some positions that I have and what I mean by moving up to chain is you start making money for my business that we’re working on and then you have a little more budget to pay them because you’re not just syncing money in to it. And so I’ve sort of hiring people that are a little more expensive than I would have originally hired. And I’m finding that those people tend to be more forward thinking even as contractors and I have people who are making suggestions about improving my business which is super helpful and it means that you’re exactly right, you don’t have to micromanage when you start getting good people like that but they tend to be a little more expensive for sure.

[23:55] Mike: Yeah, I mean I have one guy who’s been with me since January so he’s — he’s done things like that where he’ll see something and he’ll just do it and I’ve told him upfront in numerous times like, “Look, if you find something or see something that should be fixed or could be done better, just go ahead and do it.” And there’s been several times where he’s just like, “Oh and by the way just to let you know, I did this,” and I was like “Wow, that’s awesome. Great. [Laughter] You know, great. Thanks.” So he’s definitely aware of those types of things but, you know, I don’t — obviously, I don’t get that from everybody. One of the things that I’ve had the contractors worked on is the AuditShark’s sale site because I — the site is out there right now. It’s okay. It was just kind of meant to have a website but I’ve put a lot more thought and effort in to the website itself as a, you know, kind of sales machine at this point. So what I did was I hired out to design and had somebody build everything for me and then I had to put together. And basically, what I did was I generated all the content for all the different pages and one of the things I found was remember that survey, the Wufoo survey that I was running a couple of months ago?

[24:55] Rob: Yup.

[24:56] Mike: What I did from that was I was trying to build like the FAQ page because most larger applications are semi complicated applications have an FAQ section. And what I did was I went through that and one of the questions in my survey was “What concerns or questions do you have about AuditShark?” or “Would you have about, you know, a service like AuditShark?” And I basically was able to fill out my entire FAQ based on what people answered there.

[25:23] Rob: Nice.

[25:23] Mike: Oh, the nice thing was it was people raising objections. I mean and that’s really what —

[25:29] Rob: Sure.

[25:29] Mike: … what the people were saying —

[25:30] Rob: It’s perfect.

[25:30] Mike: … is like, you know, “This is why I wouldn’t use this product.” And I was able to say, you know, somebody — somebody said “I would be concerned about the quality of the code,” for example or “I would be concerned about how trustworthy the application is.” And of course, you know, how do I answer that because I’m a small company and that basically just laid it out in the sale site and then the FAQ and just said, “Look, you know, I’m one person. I’m building this but here’s my online profile. Here’s my LinkedIn account. Here’s the podcast that I run. Here’s the conference that I helped run. I’m all over the internet. I have absolutely no intentions of starting my — my entire online identity over again.” And you know, and that’s basically what I’m kind of relying on for my initial trust. I think that it’ll change overtime as it becomes I’ll say more corporate and I established a lot more generalized credibility in the field but you know, for now, I don’t really have a whole heck of a lot to rely on. So…

[26:24] Rob: Right. And I think you’re — you’re ahead of the game because when I bought HitTail basically the trial to conversion funnel was just a bit small. I mean it was like, I don’t know, 1% or something of people who started trials converted. And one of the things that I did after I relaunched in January was e-mail. I had my VA e-mail everyone who canceled during their trial and asked why they canceled. And he did that for a few weeks and I got this great list of essentially were — they were objections. And so you already have that and you haven’t even launched yet. So that’s awesome. But what I did is I took those objections. I categorized them and there were seven different groupings basically and there were things like, “I don’t have time to use HitTail,” and so I said, “Okay. What’s the solution?” The solution is they should be able, you know, write articles with one-click and that’s why I built the one-click article feature.

[27:13] Another one was “I don’t understand the difference between this and Google Analytics,” or they’d say things like “I get the same information from Google Analytics.” And the fact is that it is just not true and so I was like, “Okay.” So the solution to this is to educate them. And so during the trial now, I had the 30-day trial, people receive about — it depends on how often you log in and some other things you do but you receive about between four and six e-mails during that 30 days. And some of them are purely educational on like SEO, you know, on content generation and other ones are — are more specifically to HitTail and so one of them is just two questions. So it’s kind of like the two most important questions I think people have and it has the questions that has kind of a one sentence answer. And then it says, “You know, here’s a link to a 60 seconds screencast that does even — an even better job in answering these questions specifically.”

[28:06] And so if they click through from the e-mail, they go on to my FAQ and there’s a big video, you know, that they can watch right in their browser and it answers that. It’s my voice. It’s me doing a screencast and I have Google Analytics on the left hand side and I have HitTail on the right and I show how you can have 1000 keywords someone found before in Google Analytics and HitTail has the same 1000 but then the suggestions are only twenty or thirty of those. Like it’s picked out the best ones you should target and that’s the key difference between the two things. So that’s just one example but there were like I said seven different objections essentially and that’s — those seven objections that I packaged together, you know, in a document, that became operation retention, right? And I talked a little about that a few episodes ago and that operation retention essentially doubled my conversion rate. The original 1% [Laughter] the trial to conversion rate went way up when I relaunched and I added credit card, you know, needing a credit card before a trial.

[29:00] But it had – still, it did not gone up as much as I wanted and so from there, I’ve now, you know, increased it by a hundred percent using this — this operation retention. So the nice part I mean the way it ties in to what you’re doing is you already have some of those objections. Certainly new ones will come up later. Once you launched, some people cancel, you know, you want to do the same thing and find out why they canceled. But you’re definitely ahead of the game on that to already have those and be able to put them in an FAQ and then I would suggest, of course, during their trial that you do like I did. You already have the info so you can just maybe call them out. You could put them right back. You could even put the text directly in to an e-mail, you know, and do one of the e-mails during the trial or you could link out to them. But definitely I have seen a noticeable increase in my conversion rate because you’re essentially able to communicate with people, you know, using the phrasing and the same questions that — that other people have had.

[29:46] Mike: Yeah and that’s been the great part of it. What I’m planning on doing the private beta that I’m doing is talking to people and asking them, you know, kind of what they’re objections are to the products then and help and use that to essentially set up the — the auto responder for when people do sign up and be able to send them some of those things upfront. I might actually — I might gather some of that information upfront and then not implement it and then wait a little while like wait maybe a month or two and just measure my conversion rate and then implement it and see what my conversion rate is afterwards because if I do it upfront, I’m not going to have any idea whether it had an effect or what kind of effect it had. I’m not real sure which way I’m going to go on that but, you know, it’s definitely something I plan on gathering.

[30:30] [Music]

[30:33] Mike: If anyone out there is using inDinero, they probably seen this already but basically inDinero decided that they were going to do away with their free plan. I mean we talked about it at MicroConf and you know, the idea is that if you’re going to be eliminating the plan or changing your pricing or something along those lines then typically what you do is you grandfather the people who were in that plan before hand and you just let them keep using it and then you start charging all of the new people. Well, they didn’t do that. They basically said, “All you people who are using the free plan, you have until July 31st and then we’re going to get rid of everything and you have to upgrade between now and then or you’re basically going to lose your data.” So I kind of understand, you know, I sent them an e-mail and said, “Look, what’s going on here? You know, this is a pretty unusual to see this kind of thing.” And I didn’t get a direct response back. I got this generic response from their CEO probably the next day or the day after kind of explaining their decision. But the initial contact that I got was just “Hey, by the way, you have to pay for this within the next thirty days or we’re going to close your account and delete all your data.”

[31:35] Rob: So they just fumbled, right? You can’t do that. If you’re — if you’re going to do that and cancel people’s accounts, you have to give them three months, six months. You got to give them a lot of notice. You’re still going to piss people off when you do that but then at least, you know, you’re giving them time to do it and I don’t see then — the logic of doing this. This really is the whole why free plans don’t work thing. Everyone thinks a free plan is a great idea. It’s going to be a great marketing approach but in the end, it rarely, rarely works unless you have doves of money in the bank and you know exactly what you’re doing, almost it never works. I’d say 99% of free plans that I see, they get removed. You can probably name a handful of free plans like Dropbox and — that’s the only one I can name right now but —

[32:16] Mike: Gmail. Gmail.

[32:16] Rob: Gmail, thank you. Well and Facebook is free, right? I mean there are free apps but these are enormous, enormous apps. If you don’t have apps with hundreds of millions of users or a huge bank account balance, it’s very unlikely that free plans work. And we talk about this before with like MailChimp. They have a free plan now but they didn’t have one for years until they were enormously profitable. And now that they are — I mean MailChimp is minting money basically. They have added —

[32:45] Mike: They handed it differently though. They handled it pretty differently.

[32:47] Rob: I know they added a free plan — they added a free plan back in. They didn’t have one to start and so they’ve added it. Now that they know their funnel, it’s optimized. They know how many free users will confer all the stuff. They can now afford to do that but to do it from the start and then cancel it like this, it’s — it’s bad news, man. And inDinero seems to do this. They seem to fumble the ball on this kind of hard, what do you call it? It’s like a decision. It’s a decision that you make that’s going to piss people off and they don’t seem to be able to handle it very well.

[33:14] Mike: And like I — I would have been okay with it if they sent me an e-mail like before they even did it, you know, like I understand its decisions like this they sometimes have to be made and I would have been okay with it if I gotten an e-mail that says, “Hey, look. We’re really sorry. We put up this free plan and not only is it not working now but we are actively losing money. And we need people’s help and this is what we’re going to do. We’re got — we have to start charging for this plan if you really want it and we’re going to leave it in place until the end of the fiscal year,” because this is financial data so the problem is that because they did it after I forget when I got the e-mail, I’m pretty sure that it was last week, but it was basically after the six-month mark.

[33:54] So basically most banks and stuff, they only let you go back six months after that — or three months and — and pull out the data electronically once you get past that three or six-month mark depending on the back, it’s kind of a pain in the neck to go back and get stuff from beforehand. So like even if you’re doing QuickBooks or pull in transactions through QuickBooks, a lot of them only allow you to go back three months, so that means that there’s like three months of transactions that I would have to manually pour over some place else.

[34:21] Rob: Yeah.

[34:21] Mike: And it’s just like you’re totally screwing your “customer-base” who kind of helped make you popular enough to get you to the point that you are. And I got no notice and that’s really what pisses me off about it. It’s like I got no notice. It’s financial information and then say, “Oh, and by the way, if you don’t want to lose this, you know, you’re going to have to pay us, you know, $30 a month.” And I basically have to until the end of the year. I’m not happy about it. I already signed up. The other thing that they had said in their e-mail was “Oh, you can log in and you can get your data.” Well they replaced the log in with a popup like a modal popup. They come up and says, “You know, your free trial has expired. Please enter your credit card information.” See, you can’t even get your data out unless you pay.

[35:01] Rob: Yeah, yeah, that’s — that’s a bummer. Have you e-mailed — I wonder if you e-mailed them directly if they had export your data but —

[35:06] Mike: I did and they did —

[35:08] Rob: Yeah.

[35:08] Mike: … sent it to me. And they said —

[35:09] Rob: Okay.

[35:09] Mike: … “Oh that’s a bug we’re fixing it,” but…

[35:11] Rob: Right. In full disclosure, I have three inDinero accounts that I’ve — that we’ve been paying for; the Micropreneur Academy and MicroConf has one and then I have one for all of my Numa group businesses and DotNetInvoice has one because that’s a separate partnership. And so I’ve liked inDinero. I like some of the stuff they do. I think we commented a couple of months ago about how they kind of flub the thing around tax time where they removed a bunch of or a couple of different types of categories and it basically wracked my data right as tax time was coming and then I e-mailed them and didn’t get back to me. It took them like ten days to get back to me. And I had — I spent like three or four hours doing manual updates to it. So that made me mad.

[35:49] But in general, they — they have hustled and they’ve done a decent job at the product and it is one of the better products out there for doing this, so I’ve always cut them a lot of slack but this kind of thing is in my opinion and I’m not even — I don’t have a free plan so I’m not like directly being affected by this but this is — it’s a bad sign for me, right? It’s a bad sign that they aren’t being more careful with the kind of changes that they’re making to their apps and giving people more of an opportunity to — to get their data and to upgrade gracefully and that kind of stuff. Do — we received an e-mail right? Someone suggested a different app that does something similar?

[36:23] Mike: Yes, somebody sent an e-mail. Well, actually it was unrelated. They had sent an e-mail to us commenting about episode 85 where we’re talking about free and low cost solutions for entrepreneurs and it was called Wave Accounting. And it looks largely similar to inDinero. I haven’t signed up for it yet. I probably will but it looks very, very much like inDinero except that it is free. Basically, the way they make money off of it is kind of like Mint where they make recommendations and suggestions to you for different products and then they get paid commissions on those products.

[36:58] Rob: Right. Yeah, I got to be honest, with then trying to launch with free I’m very skeptical. I would not, personally, would not —

[37:05] Mike: No, it’s —

[37:05] Rob: … put my accounting on it because I know they have a revenue model but they’re going to hit scale and if they don’t, they’re going to come back and probably pull the same thing that inDinero has.

[37:12] Mike: They — they — I don’t know. They’re claiming they’re getting tens of thousands of users signed up every month and they’ve — I don’t know how long they’ve been around. I haven’t really dug that far in to it.

[37:22] Rob: Sure.

[37:22] Mike: But I’m definitely going to start looking at it.

[37:24] Rob: I’m just telling you I’m —

[37:26] Mike: I agree.

[37:26] Rob: … personally hesitant to base my business accounting because of how complex it is on an app that that is free. But I would prefer to pay. If Wave was this good and they charge me and I was able to pay, I would prefer to do that. And obviously not for — like for an app like Facebook, I’ve, you know, I would prefer to use it for free because that’s how it is and it doesn’t — doesn’t matter if Facebook went away, it wouldn’t bother me. But if I’m in Wave Accounting and I’m six months in and suddenly something catastrophic happens or they have to shut down because they don’t have money or they, you know, pull this — this thing like inDinero did and they suddenly want to charge everybody and they’re going to lock my data up then, you know, that’s not going to work.

[38:02] Mike: Yeah, I mean for me, it’s not about having to pay for it. It really isn’t. It’s about —

[38:06] Rob: No, like hey —

[38:06] Mike: … how it was handled. I don’t mind paying for it and I mean this is — the business that I have this for is more of a shell company at this point and I’m just not — I’m not really using the data but I kind of need —

[38:18] Rob: Yeah.

[38:18] Mike: … to have it some place. So I threw it in — in inDinero because I knew that it was going to be under their fifty-transaction a month limit.

[38:28] Mike: Yup. I got to tweet about it and you know, from them saying, “Sorry, please contact our e-mail support,” “Sorry you’re unhappy, please contact our e-mail support.” I think that they could do a better job handling it. It’ll be up more of upfront about things but I don’t know, whatever.

[38:42] Rob: Yeah. You know, I had to shut down HitTail’s free plan after I acquired it because it was just tanking the server. There were so many people using it for free that had been using it for years and years. And I basically I approached them with kid gloves as what I tried to do. I mean just e-mailing, letting them know they had a long time to — as much time as I could give them, I could — they could export their data. I offered them a discounted plan, you know, I kind of went the whole nine yards and was apologetic and said it was — I mean the reason that thing was having outages was could — which because there was too much load on the server and there wasn’t enough revenue coming in. So I’ve been through this myself and I wasn’t able to grandfather people in. There was a very real reason why I wasn’t able to grandfather people in but at least I won’t say I did it perfectly. Certainly, I had a few complaints but I guess I thought — it seems like I thought through it a little more because I knew people are going to be upset. I almost — it almost seems like inDinero maybe didn’t think anyone would be that upset about this.

[39:35] Mike: I — I don’t know like I said I’ve been — there’s — there’s a few different things. One was being completely locked out and not being able to get back in the short timeline, you know, their complete lack of notice. I mean if it been three months or six months or something like that, that’d be different or if they just said, “Look, in October or November or something like that, then we’re going to have to stop offering this free plan,” but it was just — there was no notice or whatsoever and then just the way that they’ve handled it since then, I just turn — it turns me off to them completely at this point.

[40:03] [Music]

[40:06] Rob: Well, listener if you have a question or a comment, you can call it in to our voicemail number at 888-801-9690 or e-mail us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt, used under Creative Commons. Subscribe to this podcast in iTunes by searching for Startups or via RSS at StartupsfortheRestofUs.com where you’ll also find a full transcript of each episode. Thanks for listening. We’ll see you next time.

Rob, you mentioned using AppSumo to get a boost of capital in the early stages of Hittail and I’m stoked because I love the guys over there and am happy that it delivered for you. I’m wondering what other avenues or opportunities you and Mike can suggest to get jumps in revenue or financing in the early stages of a product’s life. I’m a big fan of maintaining control of the product as long as possible and not going the investor route.